Casino Enterprise Management

Few things live up to their hype: “shock and awe” devolves to shocking and awful, senior prom, and heavily advertised casino house bands like Mr. Stuart and the Schoolboy Blues. The elimination of hype and the implementation of receiving honest evaluation as a tool of improvement should be the desire of casino operators.

In the world of gaming, there is an occasional fundamental disconnect between what is believed to be true and what actually is true. (This is a universal truth: Nobody looks good in a Hot Dog on a Stick uniform. Nobody!) Some casino’s in the Indian Gaming markets use measures of accountability that suffer from a manifestation of dysmorphia.

Indian casinos that believe they are doing everything right, and thereby are lean, mean, fighting machines may be as bloated and delusional as the King on a Dr. Nick prescription cocktail.

Casinos in multiple Indian Gaming jurisdictions are putting themselves at a disadvantage with player tracking accountability because a large block of their data is inaccurate. While slot machines have tracking systems to monitor game play (e.g. denomination wagered, coin-in/out, time at device), table games are not so fortunate (with a few exceptions at early-adopter properties like Barona Valley Ranch Resort and Casino in Southern California which is also a beta site of downloadable slots and innovating marketing management tools).

While some may argue that table game tracking is prohibitively expensive when compared to the profit margins that may be realized, I contend the upside in operating efficiencies is not properly brought into consideration.

Table management systems (TMS) are the future. The technology is available, so why don’t commercial and Indian casinos use it? As with any gaming floor change (e.g. moving from electro-mechanical reel to multi-line video slots to downloadable systems and mobile gaming devices or the installation of bill validators and TITOs), potential customer resistance and changeover expense are the primary hindrances.

MGM’s inclusion of less than a score of slots in the mid-1990s that printed receipts instead of dispensing coins is a prime example of this dismissal phenomenon. The machines did not produce familiar clinging noises when the player won, nor could a customer take the receipt and insert it into a new machine—breaking the gaming cycle and forcing the player to redeem the ticket at the cashier. The beta test of these machines was a failure, simply because the cashless units did not give slot players the expected experience they were looking for.

The adopted successor, TITO systems, provided the following benefits: 1) Casinos no longer had to maintain a tremendous amount of hard currency sitting idle in hoppers on the floor. For a property the size of an MGM or Foxwoods, there could be well more than a quarter of a million dollars worth of coins that did not provide active income opportunities. 2) Labor was reduced by eliminating numerous change cart and booth personnel. 3) Casinos reduced costs in terms of coin storage, and handling labor was reduced because hard count operations could just work with operational amounts of coinage. 4) Players could and would play longer because the gaming cycle would not be broken (thus giving the house its time-based edge). Players did not have to go through the trouble of hauling buckets of coins around in certain denominations (i.e. a player could “ticket out” from a quarter machine and “ticket in” to a dollar machine without having to visit a change booth or the cashier). While some casino operators argued the replacement cycle on machines would be cost prohibitive, most realized the savings. The majority of casinos have decided to make TITOs as common as bill validators and spin buttons.

Table game tracking is currently on par in terms of acceptance as slot tracking was in the early 1980s. There is not universal acceptance of its worth and, subsequently, guess work on variables such as average wager and length played lead to data inaccuracies, never mind the benefits of real time analysis.

Shuffle Master CEO Mark Yoseloff  declared: “Right now, casinos are doing the same thing they’ve done over the past 50 years. A casino floor person glances at wagers and fills out a player rating slip, trying to surmise the average bet. Nothing has changed.”

Fifty years is a bit of an exaggeration. Tracking slips are now entered into a computerized marketing system, such as Bally’s SDS/CMP, Aristocrat’s CDS-Oasis, Konami’s Forcise, IGT’s Acres–Advance, or Progressive’s Casino Link System by a pit clerk, so not much has changed in nearly 20 years.

The pit clerk, like the change girl, could be eliminated with an automated table management system. This immediate cost savings and eventual reduction of fixed costs has to be considered as part of the value of TMS. Other more highly paid positions, such as the surveillance experts who spend a significant amount of time reviewing play to recognize card counters and some forms of cheating, could be scratched from the payrolls or instead concentrate their efforts on environmental security.

Even pit bosses could be freed to better interact with guests, instead of struggling to monitor games for irregularities that TMS systems will automatically catch. Casinos will still need pit bosses, but their positions may be retooled for efficiency. An analogous example is the lone cashier who monitors eight automated check-out kiosks at the super market. More groceries are scanned in less time than if the cashier was assigned to a single station.

With more than 50,000 table games worldwide and approximately ten percent of these table games at Indian Gaming properties, it is worth learning more about who the providers are and what table game management systems do. 

The companies providing table management technology, for the most part, come from slot, table, and tracking system backgrounds. The big players are Bally Technologies with their TMS products. Bally’s TMS offers real-time player tracking on table games utilizing the patented artificial intelligence of VisionCore™ embedded high-speed image processing. The VisionCore optical system automatically recognizes chips and cards to ensure accurate accounting, player tracking and dealer performance.

TMS blackjack and Baccarat products give real-time information on items such as time played, actual amount wagered, betting patterns, and win/loss amounts, providing accurate data for rating and evaluating players to determine the appropriate complimentary levels.

The technology is designed to allow for data integration with established tracking and marketing systems. Although the proprietary chips used with this system cost about 20 cents more than a standard chip, they are about a dollar less than RFID implanted chips used with the PGIC/Shuffle Master/IGT system discussed below.

On June 15, 2005, those three companies made a worldwide product integration agreement to create a comprehensive, automated table management solution using complementary capabilities, technologies, and resources.

Under the terms of the agreement, Shuffle Master is the provider of automatic card shufflers, card reading intelligent shoes, card and chip sorters, and verifiers. IGT is the provider of back-end table gaming management systems, including player tracking, patron loyalty and rewards, and bonusing applications. Progressive Gaming is the provider of RFID bet recognition, automated gaming chip tracking, and payoff recognition. Each company cooperates to interface their respective products into a combined product offering known as the Intelligent Table System (ITS)/ Table iD™. The agreement also provides a framework for the cooperative development of new technologies and products that build on automated table management and real-time monitoring of player activity.

The third provider of table tracking technology is Tangam Game Tracking. This system is comprised of Tangam Player Recognition, which automatically recognizes player identification cards and links players to betting spots for tracking play, and Game Tracking Intelligence Surveillance. This solution eliminates the need for pit supervisors to manually “swipe in” players for tracking purposes.

Prem Gururajan, president of Tangam Gaming, said “Tangam is the first and only company in the gaming industry offering a revolutionary solution that can automatically recognize cards and player decisions without the need for special tables, specially marked cards, or electronic card shoes. …Our game tracking, intelligent surveillance, and player recognition products take the concept of the intelligent table to the next level, offering an unprecedented level of automated data gathering. Our team is confident that the unique and superior features offered by our products will be welcomed by the gaming industry.”

The Tangam system uses visual recognition, but unlike Bally’s TMS, Tangam’s does not need specialized chips. By not having to replace chip stock, smaller casino operators may be more easily sold on the idea.
The purpose of TMS is to give the casino an accurate read on a customer. Although all TMS are not the same, most work with a shoe, identify hit cards and doubling down, record wins/losses, clock hands dealt per hour, and, most impressively, check variance from strategy.

Some players may shy away from the system, especially if, in their view, too much information is garnered about them by the casino. Max Rubin, author of Comp City and a casino consultant, has stated that these systems are detrimental to card counters and advantage players.

Other players who have traditionally been ignored by the pit can now build all-important relationships with the casinos by having game play monitored. Actively tracking table players has the residual affect of enhancing, or even growing, the loyalty marketing database.

In a competitive market, where is a table player going to wager? Where he doesn’t get anything unless he bets the minimum $25 per decision that the house deems worthy to track or where, like the nickel slot player, all play accumulates into points or other rewards for reinvestment? 

Simply put, table games in a competitive market can become a commodity. Witness what happened during the introduction of slot clubs with the migration of players to operations that recognized and rewarded their play via tracking. Now that a casino knows John Doe not only plays slots but also is a steady double-nickel blackjack player, marketing efforts can reflect this reality by offering incentives such as match plays or invitations to table tournaments.

The primary benefit, besides allowing the casino to monitor key performance indicators (KPI) on all players, such as hands dealt per hour and chip float inventory, is an ability to recognize skilled players and cheats within minutes instead of hours or days. (There is a slight delay built into the systems so casinos cannot “cheat” players by shuffling up when a rich deck is present.) The same technology is also applied in the player’s favor by being a method of assigning a skill level to the player.

Most casino analysis takes a few variables and plugs them into formulas assuming some elements or parameters, such as hands per hour, are constants. The reason KPIs are so important can be seen in the following equation:

•    $100 wager x 73 (assumed number of hands per hour) x 0.015 (house percentage) = $109.5, or about $36 (1/3 theoretical) in comp value.

The reality is the player may be playing $100 on the first hand the pit boss watched and recorded as the average wager when the player bet $100, $60, $60 (uh-oh pit boss), $100, providing an $80 average wager.

Further, the gambler could be a kibitzer and slow playing allowing only 50 hands to be dealt per hour. The more accurate equation would be:

•    $80 x 50 x 0.015 = $60, or $20 in comp value.

In one hour of usage, the accurate calculations provided by a TMS just saved the house approximately $16 in comp costs.  

In a perversion of real world logic, the less talented the player is in a game of skill like blackjack, the more valuable he is to a casino. A “1” player plays perfect basic strategy.

If a player doesn’t hit a 7/A against a dealer’s ten-value up card, he is probably not a student of perfect basic strategy and thus will be ranked a “2” (assuming he does most of the plays correctly, such as doubling on 11 and splitting aces and eights). The player who breaks the rule of “F” (splitting fours, fives, or faces), likes to hit 16 against a dealer’s 16, or stays on 3/A (I’ve seen it) will be deemed a “3” player.

Over the long run, the 3 blackjack player is going to provide a greater hold to a casino via actual loss. The theoretical house percentage of about 1.5 percent remains the same for all level players, but the actual house win percentage will most likely be higher. The variance from strategy is what delineates the ranks.

Should 1 and 3 players receive the same level of comp consideration? Of course not! A 1 player is a smart player and casinos need to be smart enough not to give away the house. The 1 player is simply not as profitable as a 3 player. These types of ranks should be used as weights to adjust reinvestment strategy.
Other marketing opportunities are boundless. When a casino truly knows the gaming patterns of its customers, then it may intelligently pursue their business. Reinvest in the most desirable players; those with the highest equity forge loyalty.

There is still a long way to go. Slot tracking can collect data on all machines from traditional reels to video poker and “Australian” style multi-lines. At present, only card games such as blackjack, Baccarat, and some carnival games can take advantage of table tracking systems. The physical nature of games like craps and roulette make tracking more difficult, but the technology of game tracking is evolving.